Poundland reports 68% hike in annual profits

The discount retailer said sales for the year to March 31 had topped £1.1 billion on 11.4 per cent year-on-year growth but warns trading in the current financial year has been “relatively subdued” against “exceptional” 2014 figures

Poundland has reported a surge in annual profits but warns trading in the current financial year has been “relatively subdued” against “exceptional” 2014 figures.

The discount retailer had reported in April annual sales for the year to March 31 had topped £1.1 billion on 11.4 per cent year-on-year growth.

Reported pre-tax profits rose 68 per cent to £36.2 million on a 2.4 per cent increase in like-for-like sales, though sales had slowed in the final quarter of the financial year, up 3.5 per cent to £228.9 million.

The group, which made its stock market debut in March 2014, said total sales growth – including from having added 60 new stores last year – have slowed to just over four per cent against what was an “exceptional” first half last year.

The group notes its store estate swelled to 588 in the 2015 year to March, and forecasts it will open a further 60 new stores this year.

The retailer is facing a full investigation by the Competition and Markets Authority (CMA) relating to its proposed £55 million takeover of rival 99p Stores, which could result in an order to offload some outlets.

The planned merger, announced in February, would swell Poundland's store network to more than 800 outlets.

However the CMA said in a statement in April the deal could lead to a “substantial lessening of competition in 80 local areas where the companies overlap” as well as in 12 further areas where they would compete “in the near future”.

Chief executive Jim McCarthy said Poundland and its Dealz brand operating in Ireland are “still under-exploited... with many more years of new store opening growth”.

However McCarthy said the first half of the current financial year will be “relatively subdued” compared with last year, when the group had benefited from the a boom is sales from loom bands and the later Easter holiday.